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Penn National Cut to Sell at Loop Capital on Valuation

Penn National's almost-quadrupling in the past year is overdone, Loop Capital says, cutting its rating to sell. The stock on Thursday has wavered.
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Penn National Gaming  (PENN) - Get Penn National Gaming Inc. Report shares were wavering after Loop Capital analyst Daniel Adam downgraded the stock to sell from hold amid “too many red flags” for the casino operator.

The stock’s almost-quadrupling over the past year is overdone, he said in a commentary cited by Bloomberg. The gains stem from investor “hope” that Penn can take advantage of the online betting craze, he wrote.

Penn National shares recently traded little changed at $104.23. It has traded on Thursday up as much as 1.4% and down as much as 2.2%. Adam has a price target of $60 on the Wyomissing, Pa., company.

One problem is that Penn offers its Barstool app only in Pennsylvania, Adam said. Another is the chief financial officer’s sudden departure this month. “Simply put, there are too many red flags for us to justify a hold rating,” he said.

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